Credible assessment of sustainable procurement is becoming a ‘must have’ valuable tool for global manufacturers. The will to purchase in an ethical manner starts the process, but this alone is not enough to address the supply chain CSR requirements of household-name customers or to deliver the right documentation for responsible businesses, plus they want to be sustainable – both environmentally and financially.
Consumers are vocal about their desire to spend money on brands that reflect their values, which, increasingly, means brands that are open and honest about how they operate and what is at the brand's core. The myriad of choices in almost all FMCG categories means that consumers are able to be selective, particularly when their chosen product can be used as an extension of their personality on social media.
While 'values' can mean very different things to different people, what is consistent is that sustainability rates highly across demographics in importance. How a manufacturer makes its products helps to build that brand perception, whether that is because it is clearly communicated or because of reputation, so the supply chain behind each brand has a key role to play in supporting its long-term success. Manufacturers increasingly want to do the right thing too, to protect their business, their employees and their reputation.
For global brands, reliably knowing that each element of their supply chain is acting in a responsible and ethical manner is integral to awarding these sought-after contracts in the first place. For manufacturers, being able to prove that they meet these elements is just one important step in the journey to working with such customers. Sustainable procurement addresses the manufacturer’s own responsibility to purchase responsibly and helps deliver on the CSR credentials that meet their customers’ sustainable procurement agenda. So how can manufacturing businesses that want to practice sustainable procurement be sure that their actions are as transparent as their goals?
Emmanuel Duffaut is the sustainability director for global plastic packaging manufacturer RETAL, whose customers include some of the world's leading food and beverage brands. Duffaut's understanding of sustainable procurement has supported RETAL's ongoing focus to ensure its suppliers are responsible companies that perform highly in CSR and seek continuous improvement, answering its stakeholder demand for reliably and systematically guaranteeing sustainable procurement across its multi-national operations. He says, “The most important thing is to ensure that we buy raw materials, goods, and services in the lowest impact, most responsible manner possible. Secondly, we must have a formalised way to report that for the advantage of our customers. Part of my role is to identify and implement a structured, standardised approach to RETAL's procurement to give visibility to our values and to help make it easier for our existing customers and potential customers to work with us.”
This formalisation must appreciate that different suppliers will be at different stages of their own CSR journey, so working together with a known structure helps to highlight the importance of CSR management and how it supports good business. Global customers must be able to trust and recognise the results of their suppliers’ CSR performance in order to meet their own sustainable procurement goals.
That 'structured, standardised approach' is widely appreciated to include the ISO 26000 definition for social responsibility, which includes guidance on sustainable procurement for B2B manufacturers within its definitions for 'assessing an organisation's commitment to sustainability and its overall performance'. One of the original architects of the ISO 26000 standard is Martin Neureiter, whose organisation CSR Company International has gone on to develop 'The 7 Toolkit'. CSR Company International is uniquely dedicated to CSR and is one of the largest companies of its kind. Neureiter says, “I have close passionate links to the ISO 26000 standard; I was the global chair for its development. It was one of the largest ever ISO standards, with 99 countries involved in its creation, compared to 35 for the ISO 9000. I think this is because there is a great expectation for the ISO 26000 as most of us realise and appreciate that sustainable social responsibility is for the benefit of us all. I make no secret of the fact that our 7 Toolkit is very much guided by the ISO 26000 approach as I believe it to be thorough, relevant, and reliable.”
Dynamic communicator Neureiter explains how CSR is not a box ticking exercise, nor is it a way for irresponsible businesses to greenwash their marketing. Rather, CSR is a way for responsible businesses to standardise their actions in a quick-to-prove manner. He says, “CSR as a business philosophy and management system involves the way companies operate. I'm not interested in corporate philanthropy that's simply about looking good. I differentiate valuable CSR as being about accurately and honestly addressing your company's material impact; it's not about what your business is doing, it's about how you're doing it.”
This 'material impact’ is commonly known as ‘materiality’; it refers to the most relevant topics that encapsulate the organisation’s main environmental, social and environmental impacts, and that influence the decisions of its internal and external stakeholders. Companies do not define their own materiality, but rather they involve their relevant stakeholders in order to make the process accurate and transparent. Materiality is at the heart of understanding CSR, both in terms of attributing a score to a company's current performance and seeing where constructive improvements can be made. The 7 Toolkit, which is just one of the commercially-available software platforms available for assessing a company's CSR performance, takes seven core subjects of ISO 26000 to define the company's CSR rating; organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues, and community involvement and development.
These seven subjects each require proof of certain elements to prove the company's current position. Neureiter adds, “Through the recognition of a large set of stakeholders, corporations shall develop a strategy and a roadmap, creating measurable steps towards the implementation of more responsible business practices. It's not about your core business, it's about how you do business. Accurate CSR analysis gives a clearer picture of where you are and where you're heading – and how you can improve.”
RETAL is using The 7 Toolkit to effectively manage CSR across its 17 plants worldwide and in its supply chain; the company proposes a subsidised license of the tool to its suppliers for them to manage CSR and evaluate their performance and share their results. Duffaut says, “I value the transparency and credibility of this evaluation process that strictly follows the ISO 26000 and is based on evidence, the evaluation process and the improvement guidance. When I joined RETAL, I appreciated that the will was there to operate every element of the business in as responsible way possible, but it was hard to standardise across global factories and to quickly prove our responsibility as a supplier. The 7 Toolkit makes that that challenge easier and supports our long-term sustainable business practices.”
With CSR a core business issue across industries, particularly now that the end consumer is more in the spotlight, every element of a brand's supply chain needs to be transparent and responsible, both in order to be chosen as a supplier to global brands and also to be a place where it's employees are proud to work. Duffaut adds, “Engaging with our stakeholders is a smart way to ensure we continue to gather their thoughts, listen to their values, understand how their approach needs to impact on our business. Mitigating our impact as a manufacturer starts with making sure we make appropriate decisions right at the start of our own procurement; just as consumers want to buy from the right brands, so too do we want to be the right supplier. Long-term success is the goal for all of us, and that only comes from making sustainable, responsible, transparent decisions.”